CII-AP concerned over increase in VAT

The Confederation of Indian Industries Andhra Pradesh (CII-AP) has expressed concern over the proposed increase in value added tax (VAT) to 5 per cent from the earlier 4 per cent. According to the industry body, as 3,000 products come under the Schedule-IV list, this will have a direct impact on the consumers.

The order has come at a time when the country has seen poor industrial growth of 3.3 per cent in July this year, compared with 9.9 per cent during the same month last year, as indicated by the recent Index of Industrial Production (IIP) data, it said.

Suchitra Ella, vice-chairperson, CII Andhra Pradesh & joint managing director of Bharat Biotech International, said, “The primary reason given for the increase is that the share of state government in the central taxes has fallen short by about Rs 500 crore.”

“There is no appropriate justification for levying taxes to raise the revenue beyond the said shortfall. The state government should have resorted to better expenditure management practice rather increasing taxes,” it said.

The common man is already reeling under the impact of high inflation,” she stated in a release here on Wednesday.

Though many states have increased the VAT according to Centre’s guideline, the CII Andhra Pradesh said that the timing of such a measure was inappropriate.